A. The capital allowances legislation says that caravans are not prevented from being classified as plant on the grounds that they are buildings but this only applies to caravans used mainly for holiday lettings on certain qualifying caravan sites so your client will have to apply general principles. The general rule is that allowances are available for assets with which the business is carried on rather than in which or on which it is carried on. Caravans might normally be expected to be the latter. However, HMRC accept a caravan can be plant “if it does not occupy a fixed site and is regularly moved as part of normal trade usage” which, read in isolation, offers a ray of hope for your client. However, they carry on “… even if it is only moved from its summer site to winter quarters” which seems to be referring to caravan sites or similar.
To further confuse matters, HMRC say that a caravan used to house farm employees can be plant even if it occupies a fixed site but this treatment does not apply to other trades. Such a distinction does not appear to have any basis in law.
If you have a tax query, why not contact the Tax Advice Line on 0844 892 2470 to discuss it. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.
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